Andrew: Hey everyone it’s Andrew Warner founder Mixergy.com home of the ambitious upstart, you guys know what we do here, I interview entrepreneurs about about how they build their business, proven entrepreneurs guys who built companies that you’re familiar with and today I’ve got someone who has built one of the most famous phone companies out there. Carlos Bola is the co-founder of Vontage a leading provider of phone calls over internet. His current start up is Kikin which creates a plug in that brings users social networks and content to them no matter where they are on the web. I invited him to McSurgy to learn about how Vontage was formed and grew and ask him about his plans for his current company which you guys who are watching on video can see behind him is Kikin, Welcome, Carlos.Interviewee: Thank you Andrew
Andrew: Ok So Since Vonage is the company you’ve spent the most time with that’s what I’ll spend the most time on in this interview but I know you must be excited about this new company, I know you must be excited about what it is and what it does so why don’t we start there then we’ll go to Vontage then we’ll go to Kikin. What does Kikin do?
Interviewee: Kikin is about personalizing your web experience our fundamental thesis is that web experiences today are entirely technology centered. If you saw for example (inaudible) foundation. She will point out by now that grou.. (inaudible) has not just evolved over the last 15 years, as an example so web experiences today are very self.. (inaudible) they are very service centric. You get a whole bunch of stuff we love in Facebook. You get a whole bunch of good stuff from Amazon etc. but the thing we are driving for intent. If you’re trying to buy something for example.. There’s no really.. no really rational way to bring all of those functions and features that we like together at that moment, at that moment of intent that we might have. And so what Kikin is really about is user centric web experience serving users at their moments of intent relevant content commerce and services allowing them to share it and making it richer and easier to use.
Andrew: Ok I’ve got a follow up question on what you just said. I’m hearing a little bit of noise in the background that might be distracting to the audience. Is there a door that you can shut? Or anything that we can do to make sure the focus is on you?
Interviewee: I will make sure that… The door is now shut
Andrew: OK, alright great.
Interviewee: Thank you so..
Andrew: At what point would I need Kikin? I’m browsing around the internet, I’m kinda happy with what I’ve got right now what more are you going to be giving me?
Interviewee: I’ll give you intent. But what I urge the audience to go is to go try it at www.kikin.com a lot of people think it’s kinkin but it’s K-I-K-I-N .com I’ll give you an example and again If you go on our site you’ll see many examples of what it is. and I’m trying at its best. If you think of what we are doing at Kikin. You’re in a Google search or you go to IMDB or you go to Amazon.com. But lets say that your in a Google search and your trying to buy an iPod touch. What do you do. You type in iPod touch and there arrives 20 some 20 links, some paid advertisement at the top and to the right and what do you do? I want to buy an iPod touch. I click through to Amazon. While I’m cruising the catalog I decide oh my gosh id like to decide what item I have, Right?, so I pop out I click again or I open a new tab. I pop out to eBay, I see what item I have, I go back to Amazon, I go “Gosh eBay and Amazon have..” I’ve learned enough about it. What is the image gaget towards you on that item. I pop out again, I click, I jump ahead… and You get the gist. The current internet does not, the current internet experience does not take into account my intent. What if I went to Google and I typed in iPod Touch and right there in front of me are all of the content that is filtered based on my personal tastes, my favorites, that’s ready for use.
Interviewee: I pop out again, I click, I jump, ahead-I mean, you get the gist. The current internet does not take- the current internet experience does not take into account my intent. What about if I went to Google, and I typed in iPod Touch, and right there in front of me are all of the content that’s filtered, based on my personal tastes, my favorite, that’s ready for use. So, for example: what if we had the opportunity, for example, to have Amazon, eBay, Shopping.com, right there and I can peruse them immediately in a very easy-to-use manner. That’s what Kicken[sp]brings to you. So, imagine, if, at any moment of intent, you can get your favorites simultaneously there and,more specifically,the content from my favorite sources, from my social graph right there that’s pertinent to the intent of what I’m doing. That’s what we do.
Interviewer: Ok. All right. Now I can see that, and I actually happen to be in the market for an iPod touch or an iPhone, so…
Interviewee: So try Kicken.
Interviewer: …[ss] back and forth, over and over.
Interviewee: And especially if one of your favorites is Amazon or eBay, or you’re perusing Shopping.com, or in fact- more importantly- if you want to see what your friends might be saying about that item you’re trying to- trying to purchase- either on Twitter or on Facebook, we bring you right there, all of that content, all of that capabilities at your fingertips to support that intent that you have. And that’s and example that we just raised which is commerce, but we are not a commerce-centric [??]
[static]
Interviewee: [??] for example, try for a content search or try it through social networking, except no social networking intent,so that’s what we do.
Interviewer: Okay…
Interviewee: In fact, just one last point: our tagline, is “My rep always with me” and the emphasis is on my- my rep. Because a specific ocean of blue links is just not necessarily what I want all the time. What I want is my favorites all the time.
Interviewer: Ok. What you might have seen me do there is scribbble down a few questions that I have as follow-up, and I’ve been looking at the audience, and I see that they have some follow- up questions, but let’s come back to Kicken. Let’s go back in history a little bit and find out how we got here. I’d like to go back to Vonage. When you first started talking about Vonage, it had a different name, right? What was that name?
Interviewee: So, first of all, let me set a couple of preconceptions. One is Vonage was not the preponderance of my career. Fortunately or not- I’m a lot older, potentially, you know, most people think. Vonage was a relatively focused, short period of my life. It was about two-and-a-half years at the start of Vonage, and Vonage was not started as Vonage. I think that we competed[??], actually, on Vonage captures our industry very well.Just over, our co-founder had started a business called Minix [sp], the Minix Exchange, which was ostensibly to create an exchange for trading IP minutes. My partner and I, Jeff Citron [sp], and I had invested in that business with Jeff Paulver [sp], and we were building Minix, and what we realized was the voIP marketplace, in terms of the volume of minutes to be traded, were too small. And so, we start-that led us in turn to asking ourselves, “How attractive is this market in the final stage?” ,and “Can we help to catalyze that marketplace?” And that’s why Minix became Vonage. We had the assets in place, we had, especially some wonderful core in here. Jeff Citron is a brilliant- just an absolutely brilliant- entrepreneur, easily the most brilliant entrepreneur I’ve worked with in my career, and so we constructed Vonage. I don’t know if I made- a friend of mine, another investor, once said we took lemons and made lemonade- and so, that was really, really how Vonage came in to be.
Interviewer: Why did you even decide to get involved in a tech startup at that time? You were running your own boutique investment firm, you had a career that was going in a different direction, why do this?
Interviewee: So, it’s interesting to look back on my career. I’m a tech guy by training. My first job after, after education if I may, was a tech start, and I subsequently went on and did everything,did work for a large company, Digital. I went to the Boston Consulting Group, which was, I would argue, the foremost management consulting firm, and then I worked with Frank Petrol [sp] and his team in investment banking, so I’ve always had tech as the theme of what I’ve done in my career. Secondly, when I left investment banking, I was running up in electronic commerce with Frank. What was interesting about that is, and it wasn’t so much it, there was obviously luck in timing, but it was clear to me, that some of the frock[??] that was in the internet sector, which I was very familiar with [10:00 mark]
Interviewee: would come to roost. Having that I left about the time that the internet – the bubble had burst, so to speak. But the most important thing that was compelling to me about Vonage was – I was absolutely convinced that three things will happen the buy rate – that has actually been three teams since I left investment banking. I was absolutely convinced that bandwith – that pie band was going to change the world. So the concept of broadband moving away from the elocentric dial-up world at that time was absolutely going to change the world. And Vonage in fact what people think it was basically such a great void company and it ended up being. But actually Vonage was the first instance of pervasive broadband application interestingly enough. Void is a killer broadband app. And the most natural, economically and technologically broadband app. But and the other two which is about personalization and objectization are in fact the themes of Ticket. So I did Vonage and, you know, we had a company in China with my dear friends Shibel and Tom Mian called Eachnet, which is now Ebay China and then in Germany with Michael Happer and Christof Schmina called GateFive which is now Nokia. It was, for me, a natural progression. So I never created an investment banking boutique of quite frankly the country. I worked for the best investment bank with the best boss in investment banking so I wasn’t extensively going off and doing that but what I’m doing with this interview is creating a platform to maybe exploit my skills as a serial entrepreneur. And so this is why Kiken is the fourth in that series.
Andrew: Ok, and when you got involved with it with Minx, it was an exchange, right? Can you describe what it was when you guys were first kicking around the idea?
Interviewee: It was very simple. I mean, there are telecom minutes exchanges that exist today. I mean, Arbornet, was one, as an example, BandX was another at that time. So what telecom exchanges are – it’s no different than a stock exchange at some level. It was if I have excess minutes – minutes – let’s call them minutes – Say I’m an entity. I’m not selling excess minutes between Tokyo and San Francisco and I would like to trade it for some minutes between London and New York that AT&T might have. That those trading mechanisms are in place. They’re trading minutes in a telecom exchange. But at that point those were what we called switch minutes, pots minutes, laying the old telephone system minutes, so to speak. There wasn’t significant IP minutes exchanged being exchanged and it uses the IP bandwith because as you know Void – internet telephany is not about minutes it’s not about switch, it’s about data transfer. And so our idea was – we knew broadband was going to take off. What was one of the themes I just mentioned. We knew that a natural selection was telephany in broadband, so Gosh, why not try to create an exchange for IP minutes, that’s inevitable. So that’s what we were doing.
Andrew: And the problem that you discovered was that you were doing. can you talk about that? The problem that led to the creation of Vonage from that?
Interviewee: It’s a funny story. I don’t take a lot of credit for that. And the two Jeffs – my two partners at the time – would probably point that out. We had a colleague that was working – he ended up being the head of Vizep when we created Vonage. He worked with us at the inception. His name is Wu Kim if we are giving credit where it is due. And he did the analysis of the minutes exchange business over the next five years. The current state of evolution. You know – how much money would we make? And I can’t remember the exact number – forgive my lack memory, but I think it was something like we would make a whopping three thousand bucks a month of total profits. And we realized why we were being bullish on roll opportunity. And the app of Skye and Vonage on its course. What was happening via cable companies and traditional telecom companies were to date. But we realized that we were a little bit early in the cycle for the minutes exchange, so we said – Why don’t we put the minutes on the side, go actually use some of these minutes – create some of these minutes – and gosh, maybe later on, an exchange might be useful. And we ended up in this wonderful industry transformation. And again, I don’t take – I should not take much credit for that. I wasn’t here until we launched the product. Jeff Citron arranged credit for that. And also I should point out that Jeff Holden has done tremendous work in the entire IP data applications area – MinEx to Vonage to three world dial up over some of the things he’s going to do around video on IP. So those guys took it much further than I did.
Andrew: So, actually I thought that was brilliant that you said, “How big is this market? What if we owned every bit of this market? How much do we make and I don’t know how but the amount was somewhere around
Andrew: How much do we make? And I didn’t’t know that the amount was
somewhere around a few thousand dollars. I thought it was, maybe, small
millions, and I actually heard that you guys estimated, you put in a
growth rate in there, and you said, “Okay, if the market grows, its not
going to stay steady and we own all that, what does it mean?” It still
wasn’t that much. Now, I’m wondering just now, as I hear it again from
you, why didn’t you guys do that before? Why wasn’t one of the early
analysis why wasn’t it, “how big is this market, and how big is it going
to be?”
Interviewee: Very good question. So, the idea was, to also understand
our skills. Remember, I’m a tech guy, at that time I was coming out of
banking. Jeff had built, Jeff Citron[?], had built, arguably the best
exchange that’s on… at that time, for stocks, called “Ivy ECN”[?] which
was a component of Datetech Codings[?], which was his firm. And, of
course, Combergs[?] is a phenomenal visionary. I mean, Jeff called him
a wonderful guy and just a great visionary. So, what was interesting
about it, at that time, we actually did do the analysis but we did
the analysis from a different perspective. Which was… we sat back
and we said, “Minutes, as its traded, whether… irrespective of what
type of minutes, right, would those even bulk minutes translate into IP
minutes?” So if you look at, for example, all of the long haul that was
happening, if you look, at that time, Level 3, what they were doing, in
terms of within the United States, but even the long haul AT&Ts, MTTs,
Deutsch Telecom, whoever. Increase.. What happened with VOIP, a lot of
people don’t know the technology and never realized this but the first
thing that happened was the backbone the fiber-based haul was actually
IP minutes. Where effectively [noise] weren’t minutes but they were IP
packets, effectively. And then, where it switched into switch minutes
was at the point of the switch. So what happened was, that overall,
analysis for the initial investment was rational if one assumed A)
a rate of conversion of back haul into IP, and B) if one assumed that
the telecom companies were going to push that out in a meaningful way,
but as I’ve learned big companies just don’t eat their young. I mean,
rationally, it makes rational sense for, from a cost and from a revenue,
and from, more importantly, from a customer standpoint for traditional
phone companies to have converted to VOIP, but they didn’t! So, we
sat back and as I mentioned earlier, I had a wonderfully disruptive
entrepreneur as my partner, Jeff Citron. That is, that is almost the honey
for Jeff’s ears when he realized he could go and disrupt the market and
create a significant business as a function of that. So that’s how we
talked. I mean, we will never ascertain that we were perfect, that our
analyses in any way…
Andrew: I see. So, if I’m understanding you right, you took a look and
you said “Voice over the Internet is dead simple, makes so much more
sense than the standard phone call systems where you own a connection
directly from person to person, pretty much, voice over the internet
makes a lot more sense, the world is going to move in that direction,
the phone companies are going to, obviously, have to move in the smart
direction, which is voice internet, voice over IP.
Interviewee: Right.
Andrew: And that’s why you thought the market would grow and grow.
What you discovered was that the phone companies aren’t rational at all,
and I know that because time I call them up to ask them about my phone
bill, I can see how irrational they can be. And, so they didn’t move
as fast as you expected, and Jeff Pulver and you and the whole company
said, “Alright, if they’re not going to do this, they’re not going to eat
their young and switch to VOIP or voice over internet protocol then we’re
going to get into that business,” and that’s when you launched Vonage,
what became Vonage.
Interviewee: Yes, it was even worse than that, actually, worse, and
here’s a really funny story, right? Cox Communications, and I happen to
know have a lot a friends at the cable companies, and I really respect
what these guys do. Cox was very, very insightful. They realized that,
“oh my god, we can offer voice, video, and data [noise] effectively the
ISP cable, and voice at the same time, this would be great!” Right? We’ll
be called what at that time was called the triple play.
Andrew: Yep.
Interviewee: Right, I think it still is. So they forged ahead with that,
but here’s what was amazing: despite having cable access, the broadband
access in the ground, they were rolling circuit switched telephony,
not VOIP!
Andrew: Ah.
Interviewee: At very huge expense, it went all the way to having to
have a battery pack to power your… the drop, the phone drop. So they
were effectively rolling phone company-like phone plus IP for data,
plus effectively non-IP based TV in this weird bundle. So, this was a
company that had the incentive to actually do VOIP! And interestingly
enough, if you look at the cable companies today in the United States,
they’re the largest penetration of VOIP, understandably now, but back
then, nobody was moving. We, I remember we went, Jeff Citron and I,
on January 3rd, 2001, we literally had this little tour, where we went
to visit all of the cable companies, and give them, for free…
Min 20 to 25
Carlos Bhola: … free Cisco phones running Vonage. And we said “Use it! Call us back.” And remember at that time it was the Cisco 7960, which cost 750 bucks, for the actual handset, right? Which is a startup, I don’t think (indist) capitalized startup. That was an expensive free gift for a small startup to be giving away. Even a year-and-a-half later, there wasn’t that momentum until Vonage created it. So the innovators in that market were really us and Skype. Skype went off into what we call soft telephony, which is what we’re talking about right now. And even Skype took a long time to scale up. It still has quality issues relative to Vonage. And we went after what we call hard telephony, which is with the handset. (Andrew: I see) Sorry, I’m being long-winded.
Andrew: No, you’re not actually. It’s really helpful to have the explanations to understand and also just to see how irrational companies can be. I didn’t realize that Cox, a cable company, all they had to do was add phones like you have to their system. I didn’t realize that what they were doing was putting in old-fashioned cables in. It’s almost like saying, “People want to talk? Why don’t we attach some string from house to house and give them all their own little tin cans and let them talk to each other.”
CB: Dude, it’s the same thing that we’re seeing at KickIn right now. Which is why I’m so excited about KickIn. Think about it, alright. Publishers today have this big problem. Which is, they have great fans of their content — (indist) at New York Times. You’ve got people that register, you’ve got people that frequently come to your site, you’ve got people that refer stuff from your site to other places, right? Why not, instead of building these sites and then going and paying for traffic, for people to come to your site — why not take your stuff to users directly. Which is what KickIn is about, right? We are actually again inverting that paradigm. Think about it right now. If you want to go to site xyx — you go on Google or (indist) and you’re doing a search — 60 percent of all searches are address searches. You know what that means? You are typing in a destination that you know you want to go to, right? Now your browser knows that. Your browser knows that. We at KickIn, obviously we’ve got some proprietary technologies that we’ve brought to bear, but we know, in a vast majority, a preponderance of what you’re looking for and what you want — it’s reasonably well understood, if you attach the client intelligence to the service intelligence. We know that, right? Why not serve the user, why not make the user be served by my affiliations, that much better. But guess what? If you talk to most people, everybody is enamored by everything must be service-centered. As soon as you tell somebody there needs to be a download in order to be able to provide this service, most investors go, “My God, download, it’s so bad.” Yet, you know, you’re downloading apps all the time for iphone, right? So why not be able to provide that service in a meaningful way. If you’re in existence, you’re an incumbent. And it’s amazing that even the newer — Cox is an old cable company so I can understand why they were a bit archaic. But even the Internet pioneers today are not properly serving their audience. That’s just a fact. And to me, this is a wonderful opportunity.
Andrew: Isn’t the issue, though, with downloading, that people really are reluctant to do it. Many people, I think, don’t understand how to install a plug-in. Once they install a plug-in the way I did into Firefox, it very often can slow down their connection or slow down their whole browser. And there’s just too much of a reluctance. And when you’re talking about apps for the iphone, there’s still an open market there. People are still willing to experiment. But they’re not so much on the browser.
CB: Look, change is either hard, or change is made easy. You have 2 choices as an entrepreneur. Every entrepreneurial activity in some way, shape, or form, it’s about change. And I don’t buy that line that people are reluctant to do this. I’ll go back to Vonage and then I’ll give you an example of what we’re doing with KickIn. At Vonage, when we were early and stuff, people didn’t have a concept of routers. Home routers didn’t exist. So LinkSys, DeLink and those guys were pipsqueaks they were now starting. That means that we at Vonage — remember, now, we’re FedExing you a box. In it it’s got a little MTA, right? To plug into your RJ45 in the back. And plug it (lost signal) which you’re going to attach to your phone. That’s what (indist). But in order to get that RJ45, since you only have your one broadband line from Verizon, if it was DSL, or let’s say Cox, if it was Beta, we’d teach them how to config around it. Imagine home router. There weren’t that many home routers back in those days. If you ask my mom what was a router back then she would have looked at me like I was a lunatic. What we had to do, what was the challenge, was to make it easy. Today does anybody have any problem doing VoIP? You pick a phone up and you call. It’s the same exact same package you’re getting today for all practical purposes, as we were giving back then. Yes, we had to make it easy. We had to simplify. We had to make it usable. And we had to then, as there were more and more people, to make sure that word of mouth spread. So it’s the same with KickIn — you are right. If we sit back and say “Download this new thing and change this massive …”
Carlos Bhola – If we sit back and say,if you download this new thing and change this massive behavourial stuff,and slow down your computer,Nobody in their right mind are going to do that , I totally agree. But thats my advantage and,at Kikin ,what do we do? we support all the popular browsers that are out there, Chrome is coming soon.But Right now , Explorer,Firefox and Safari. the guys,we are internally testing Chrome right now. We make sure that we support multiple bearings of them, We support it for you know, Windows XP and 7.We support it for leopard and snow leopard and we make it super easy for a user to install, Better than that we make sure that user understands what they are downloading ,so that they dont think it is some crazy spyware or virus ware.
Number two, we make sure that they understand not only from whom they are gettingit,they get it typically from one of your affilliations, get more New York Times, get more CNN.right as an example, but we make sure they are getting more than just CNN or New York Times. they are getting Facebook and all the other wonderful content service providers that are our partners app. And then you know,we can, they are all easily uninstallable, you can uninstall from the actual download yourself while you are using kikin or come into your website, which will prompt you to do a one click to uninstall
Andrew Warner – And I did that, and I see that it wasnt a tough installation to do
Carlos Bhola- Absolutely,I am just saying, in summary,I think, you are right,”Change is difficult”but if you make change easy , and people love what they get in exchange for embarking on that road to change,We are observing and thats our theme that Users love kikin,and thats our only goal.
Andrew Warner- I want to come back to this but going back to Vonage, you just explained what it took for somebody to install Vonage in their home, they had to have a router, they had to understand how to plug it into their cable box, into their cable modem,and then how to plug their phone in, and how to plug their computer back in to the box, thats a lot of steps, In comes skype which you mentioned earlier, and they dont need any of this, install program on your computer if you have a headset,terrific, if you dont have a headset,its fine,now you and I are talking on Skype, did you guys miss that opportunity?
Carlos Bhola – Yes and No, you can argue that we should have had a soft and by the way you have to understand that I left Vonage for many years ago , an early illustration and so I am not either qualified or credibly speak to monetizing strategy after I left but prior to leaving Vonage, we did look at a softphone market , and we did look at a hardphone market, infact we had softphones working,we actually took softphones,and took them to Microsoft and to Yahoo for example,and We turned MSN and the Yahoo Messenger into the phone system,we allowed for you to make phone calls, we utilized that opportunity more than anybody else, MSN should have Voice from day one, Skype shouldn’t have existed neither should AOL and Yahoo. Yahoo is more of , those guys missed the opportunity as opposed to us , we on purpose did a voice,hard telephony because if you look at the economic opportunity, Vonage is still a much more economic opportunity both from a user basis and a talker basis, than Skype is,just playing on what the profitable issue is , Especially if Vonage is bound to win through a contest, or poll of opinion, or whatever, so if you look at VOIP as an hard telephony or VOIP, its is still a much more profitable and much more attractive economic opportunity in what they call soft telephony.NUmber one.
Number two , Yes it was cumbersome, Yes , infact users dint even have to have a router at the start, we would give them a router to get them going, Yes it was cumbersome and it was a little more difficult but the net reward for a user
is that. You know if right now you look now,for you to use Skype, and I am certain you are sitting in front of your computer as we are right now,But guess where you make most of your phone calls, you dont make it in front of our computer even now . You dont, perhaps you do Andrew, Sorry , but most people don’t,they still make phone calls from their bedroom, I dont know, from their basements and kitchens and whatever, So we really,focus on the existing opportunity , to calm a little bit of the task called as user change, what we tried at that time is to keep much of the task as existing user behavior,exactly what we are doing at Kikin, you dont change your browser,you dont
change your search engine, you dont do anything,We are just a great more, a value addition and thats what Counts.
Andrew Warner- Jeff Colvert,came up with the original idea,which was then called the Minax and then it became Vonage,Beyond coming up with the idea, and beyond being a visionary , what else did he contribute? I want to understand him a little bit better too ?
Carlos Bhola _ QUite frankly, Jeff was not operational,when Minax made the transition into Vantage, Jeff Citron and I were operational, Jeff was on the board, So Jeff was not an operating executive of Vonage, He was of Minax.He was the president of Minax , he assembled the original technical team.
Interviewee: He assembled the original technical team, that’s what he did. .
Andrew : So, he is the visionary, he is the guy who brings the team together, but he is not the operational day to day person?
Interviewee : I’m hesitant to say that, that would require extrapolation on my part, which I’m not too prawn to. .
Andrew : Is it in just in this experience. . this is what he did?
Interviewee : Jeff Glover was not an operating executive
Andrew : I see. .
Interviewee : Correct. .
Andrew : I met him trough. . what’s that conference that he put’s on. . I don’t wont to get the wrong name for it ?
Interviewee : Von?Softmore? Softcom? The Social Communication Conference or Von?
Andrew : The one that’s the Twitter conference. . I think it’s the 140 characters ?
Interviewee : 140 characters?
Andrew : Yes, the 140 characters. Right, right ! Then, everyone who speaks at the conference is a character, and he him self is a character, really interesting. . Wondering how that, how the conference base fits in with being as visionary ?
Interviewee : Well. . I mean. . Gosh. . I mean. . again. . I don’t know. . I’m not a psychologist , I can’t speak from Jeff’s psychological composition, but I will tell you that the conference went perfectly with the Vonage.
Vonage, V O N A G E is actually a play of words, it stands for age of Von, of Von !And Polver had coined the term of Von , Voice on net, and conference of the time called the Von Conference. . Which I think it could be sold, it was the most important Voip and at that time broadband, data conference.
And yes he did put together a lot of that visionaries, Jeff was not only a principal in our strata, but he was working with the likes of atnt’s of the world. . I remember in those days we had Alistair Woodman at Cisco. . great partners of Vonage’s
It vas very. . In Austin we did‚
So, anyways I can see where those two thing are synergistic. . again, no different then some of what we are doing. . for example. . last year at web 2. 1 conference the John Whittall and Mike Clarington. . I’m sorry and Bill. . O’railley does in San Francisco. . And it was wonderful because. . you know guess what, a lot of what we are doing, we are very passionate about. .
Facebook, and Google, and Bing‚ Microsoft etc‚ are passionate about. . So. . you know. . Today we have a wonderful partnership with Microsoft , to bring that compatibility. I think conferences , do have the role of pulling together people that share the common interests. .
Andrew : Do you have an example how that happened for the Vonage in the early days, with the Von conference?
Interviewee : Sure, I just seeing Cisco. . when we where at minic’s we where going to be in exchange, we didn’t have‚ we didn’t really push really hard on the other aspects of Von. But if you look at Vonage, Vonage did the few things technologically . . We where the first Voip company to base on what at that time was a new emerging protocol called SIP, Section Initiation Protocol. Anyways. . So Sip was completely new, everybody thought if you are going to do Vonage, if you are going to do Voip you are going to do it on this cable variante , MGCP or you do it on HG343. . which was this weird variant. . of. . sort of hack, for a lack of a better term‚ Buy you know what, we did Sip, and because of that we literally went to this conference, Jeff’s first Von conference , which is how we started to have gatherings by the way. . And we could meet everybody that was there, and we got Cisco, Cisco embraced Sip even tho it was very new at the time. Dynamics Soft was the mean provider of the technologies that we needed. We literally at Von put together this destroy cup of Cisco, Dynamics Soft and kicked in, at Vonage to do what we are doing. . So that was the underline, and I think still is the underline capability that is used for Vonage’s deployment. . So they do have an very important role. .
Andrew : Ok, how did you get the users in the early days, when this was all strange to people?
Interviewee : Well, at first. . I thin that’s an understatement flaw. . Everybody gets intoxicated by total number of users Facebook, and Twitter have. . We go. . Gosh I’m gonna go and start a business. . They you go and get 5 hundred million users and declare a victory, and that’s absolute crap! I think the first thing have to do, you got to focus to get the user experience right. You know. . And kicked in right now, that’s entirely what we are focused on. So. . right now, on purpose we have a modest user base.
The reason for that is that we would like to embrace our users, how our users embrace us. . We hope to get that right, and when you get that right that you can worry about large scale distribution. We can get the large distribution from any our large distribution partners, that are already signed by the way. I can kick in right now, but we are choosing to not do that. We are doing this very deliberately. And the reason for that is very simple. It doesn’t make sence. .
Andrew:It doesn’t make sense to distribute something that is not at least past that critical maths, otherwise you are going to end up in this thing called churn and retention problems.User is going to reject it.So its much better to go we find the user’s experience, get users to help it to make it even better and then start to allow for word of mouth referrals or the case of facebook and twitter and finally takeover.Plus, in our case both the chicken and the advantage have partners to distribute.So here it makes no difference.Why don’t we spend first year and a half getting it right.And by getting it right it wasn’t only that phone works better than in this kite connection that we are against one of the reasons that we focused on.Call in but these things like for example cutting short of this customer service experience for five.Longhead was the first company for example to allow you when you made a phone call, as soon as you hung up, from the website you can see the call data record which is a technical term.Phone comes easy so print your bill and even if you didn’t want to print the bill you got that and that’s how they charge you.You know its your data.Knock yourselves off.Check it up yourself.That’s part of the customer service experience.We also make sure we have the billing system made.For example,why don’t we go with the first, no sorry the second but it was the most fragrant all you can each plan.Back in those days remember you used to pay for the monthly reliance, you used to pay 3 bucks for every possible feature on the weekend of 13th for free to start with a bundle.You paid for local calls, regional calls, long distance calls.
Interviewee:Call reading, call id
Andrew:We just let, forget about all that stuff.For you know suppliers used to go back then so we used to forget that.In the, in the Tony conference room we used to do some of the same by the way.And no, so you have to get these elements perfect.Customer experience, right, you have to get its entire rights.If we have to just value tune that they pioneer when I was boss in the Saltin group called L D Corps.All products and services can be formed into this very simple value chamber learn, buy, get, use, pay, support and then cycle.And so we have to nail that throughout the experience and then we have to worry about the distribution so that hope we did.And guess what you know what we did as an example we did some kicking of so, you know.We never had a single price in phone line in our office.You know we are not breaking down and getting one for fax machine.We used, we aid our own recipes.We literally worked initially with our own phone service and by the way sometimes we had a partner while we are working on service or testing or whatever, the phone drop and we call back and we apologize.So guess what that’s how we get it right.So the first level of distribution was ourselves then our friends and family.Then we wrote relatively modest distribution exactly like kicking its no different and then we engage in partnerships to out large and in case of fight we just right at.We did massive broadcast, advertising, you know kunku kukuku that stuff we hear it.Sometimes we used to do that.I doubt you will be hearing that from kicking and them soon.
Interviewee:You mentioned the wikipedia article earlier and it really is a great article on bondage.Its a great story in that.But the piece on Jeffrey Citron is so freaking short, the only thing I remember that stood out was how he went to meet Jeff Polgar.He met him in a helicopter, a shore for driven helicopter that’s what it mentioned.So let me ask you this, i mean there’s obviously other articles on him that will show more what his personality is like and what his achieved.But I would like to learn from you, what you learn from him.Sounds like he was a mentor.What you learn?
Andrew:You know funny, its weird its generally we meet.So we started with strange situation.
Interviewee:Oh, get out really?
Andrew:Yeah, its not longer we meet.And Jeff was a, I have known Jeff for a longer time, before I was Jeff’s banker for day time.So that’s how we forge a close relationship.Oh gosh I don,t even know where to start with, what I learned from Jeff.I learned a lot of things from Jeff.And as in the case of all the relationships I learned lot of things that one should do and lot of things that one should not do.First of all, as the team select a issue of Jeff’s helicopter or Jeff’s arrival.I don’t know that the world wanted partnership is biased in the direction of guys who have done it before and been successful not being able to do it again.Actually I would argue with concrete chat,this is been successful to twice before and fundamental change disruptively sold to the financial services industry and contracting I champion win like that.I fall in tremendously for that, and lot of skills they teach, exercise is very well in that environment, applied very well to us.And so I learned that the heart beat a lot of words that I said to you for getting things right.You know Jeff himself, I focussed on…
Interviewee: I focus on the business aspects of Vonage. So marketing, sales, distribution, that kind of stuff. Business modeling like I just mentioned, the all you can eat plan, that was my stuff and Jeff worked a lot on the network, the offering itself, etc. And I’ll give you a simple example. You mentioned earlier. When we were rolling out Vonage, people didn’t know what routers were. It was just a fact of life, right? So you needed to figure out do they have DSL. Is it a cable modem or a DSL modem? What kind of router do they have if they have a router? How do we interface it? Etc. And from day one Jeff’s goal to the entire company was, and I would never forget that. He was like, “Within 15(50?) months, I need to be able to send a fedex package to my mom with Vonage. And she needs to be able to get it up running and make a phone call to me. The first phone call she makes to me must be on our phone system.” Now let’s focus on that. I think I was really really very intelligent. Jeff was also a guy who, while we weren’t frivolous with our capital. Jeff fundamentally believed that if the opportunity is so attractive then don’t let resources be a constraint. And he was very good about that. So, I can go on about a lot of lessons that I learned from Jeff but, those are two that come to my head.
Andrew: You also said something that I wrote down here earlier that you also learned what not to do. What do you mean by that?
Interviewee: You know when you’re starting a small company, and when you’re a serial entrepreneur there’s a tendency to bring learnings from one successful (kitties?) into another successful (kitties?). Even if they don’t apply very well. And so you got to be very careful about that. You got to be able to surround yourself with people who are going to question some of those fundamental assumptions. Because it’s a new environment. So for example, it was a directed consumer business, as an online trading platform. I’m not convinced that vonage necessarily needs to be only a direct consumer business. Vonage could have just as as well been a powered buying business. Where we powered the cable companies and the local phone companies etc. Granted, revenue would’ve been lower, but profits would have been much higher because we wouldn’t have had customer acquisistion costs, etc. So, there’s things that it’s very important, and again I give Jeff credit for this. Jeff was not doing a one to one mapping. Jeff was very clever about applying some of those learnings. But, by the way, that’s the nature of entrepreneurship. Entrepreneurship is about change and innovation. What comes with that is errors because if it was obvious nobody would be doing it. It would have been done already. And so, we made mistakes as we went on as a company individually, etc. But that’s life and you learn in your fault.
Andrew: One last question and then I’d like to move on to (Kicken).
Interviewee: Sure…
Andrew: Why did you leave Vonage so soon? What happened?
Interviewee: Nothing of a really…I wouldn’t say anything happened per se. As you noticed the way I’ve built businesses. I get to a point of maturity and then move forward, number one. Number two, Jeff was much better for that opportunity CEO than I was. No doubt about it. Number two. Number three, I had another (editorial) company in China that was getting to maturity. I needed to go forward. And quite frankly number four, in a direct consumer type environment which for example (Kicken) is not, even though it could be. I’m just not the best suited person for that. So I enjoyed getting to the point of the product getting out. And we had it, and at that point we were also starting to hire really good executives into certain positions. And Jeff was able to take it forward, I was very pleased for that to occur, quite frankly.
Andrew: After all these startups that you’ve been involved with, do you yet have a chauffer driven helicopter?
Interviewee: No. but with all due respect. I didn’t make as much money as Jeff…so there’s a little bit of an economic constraint associated with the answer.
Andrew: Yeah, helicopters are pretty freakin’ expensive. Ok, so you had this idea for (Kicken). We talked about what the goal is…
Interviewee: Oh and by the way…one quick thing about Jeff, well yes he does have a pilot. But Jeff is a helicopter pilot himself too, so nobody criticizes (Larry Ellerson) for running around in a private jet especially because he flies it himself. So, I would like to put in an applaud on behalf of my partner that it’s not all that.
Andrew: Oh, no question about it. Frankly, if you have a helicopter that you’re using to get to a meeting. And that’s a great way to come into a meeting. Imagine a guy. Imagine Jeff Pulver, wants to talk to you about starting a new company and you don’t just walk over, you don’t just take the subway, you don’t even take a limousine. You take a helicopter. Jeff must’ve just been “Alright, this guy knows what he’s talking about, whatever he needs I’ll give him that deal.” That’s a way to start off a deal.
Andrew: That’s a way to start off.
Interviewee: Yeah, but honestly speaking, again, let me clarify two
things. One is if you look at the geography, Citron lives in lower New
Jersey and Pulver lives… has his place in Melville, Long Island. As the
crow flies, trust me, going through, driving that distance to get there,
it’s suboptimal. Even if you didn’t have a helicopter, you might have
been prone to lease the helicopter, number one. And number two, I want
to also make sure you understand this, while the helicopters and the
jets were cool, and they made us very efficient, nobody would give Jeff
Citron a deal because of the helicopter arrival. Let me be blunt. He
was phenomenal for, especially… I mean, if you look at what he had
done, he disrupted exchanges. The most powerful exchanges in the world,
which were stock exchanges. You know, Ireland[?] was sold to Instanet,
and today Instanet is Ireland. It’s like, to me, the guts and that
was, you know, Josh and Jeff had done that. So, we were building an IP
exchange, and guess what? Jeff’s skill was perfect for that. I’m sorry,
I don’t… maybe there’s some Wikipedia article about Jeff’s helicopters
but that had no bearing whatsoever on Minix or [?] or Jeff’s skills
thereof. I don’t buy it.
Andrew: Nah, I usually spend a lot of time on details of business,
I want to know how you got your customers, how you came up with the
idea. Whenever there’s a sexy topic that I can toss in there, especially
if it comes from a source like Wikipedia, I use it as an excuse and get
in there. And believe me, people are loving it, I see it in the chat
room. Disrupt big markets… is kicking[?] disrupting a big market? What
is it?
Interviewee: Sure. Well, think about it. I mean, the entire consumption of
media is shifting away from traditional broadcast channels to interactive
channels. The [bad thing of the web]?, if you look at the development
of wealth in media, right, in any new channel, it doesn’t happen in
the first ten to fifteen years when things are techno-centric. Yes, it
looks like it happens then, because relative to the base, its very low
but actually great wealth creation happens when these channels becomes
user-centric. That’s why our theme is about user-centricity. When
consumer behavior becomes the major driver in the media channel,
guess what happens? He who serves that user intelligently, and better,
succeeds. So, I mean, the great example is, look in TV, right? When did
HBO come along? Relatively late in TV’s gestation. Yet HBO is arguably
the most valuable content property for TV today, that Jeff Bewkes runs
at Time Warner. And so that’s, I think, where we are. I think we’ve
got an opportunity as users’ behaviors are shifting from traditional
channels on-line and as on-line is shifting from techo-centricity to
user-centricity as, I would argue, [unintelligible] but as the player gets
at the forefront of that wave we have an opportunity from an economic
but more importantly, from a mind-share and a usability standpoint, to
be extremely valuable going forward, and so that’s what we’re focused on.
Andrew: You said earlier that you get feedback from users and you use
that to improve the product and then you give it out to them and they
give you more feedback. What’s your feedback loop like? What do you use?
Interviewee: We have multiple ways in which we work in terms of
feedback. Number one, we have 550,000 private beta customers right
now. It’s public, but it’s quiet, as a beta. And we love our users,
we thank our users for being as patient as they were. We do multiple
phase-in, A-B testing of various elements that we… as we bring them to
market, number one. Number two, we use all the classical feedback channels
that we have that are out there. And quite frankly, we have outreach
programs. We are prone to, for example, using established platforms like
Facebook and Twitter, and Craig’s List, etcetera, to solicit, actively,
feedback from our users. It runs the whole gamut. And lastly, and
probably as importantly, we are users ourselves. We are highly opinionated
people, as you are probably hearing from me, and as a reflection… me
being a reflection thereof. And so we battle it out internally as to
what’s best for our users, and what’s not best for users. Lastly, a
very key constituent that we serve are publishers and advertisers. And
so my colleague, Larry Allen, who is our Chief Revenue Officer and
his team, reaches out actively to them, and then most important that
I want to stress this, we have for a small start-up we, from day one,
architected what we call a trust and safety policy. We do not want to
be like Gatorclaria[?], or Nebulat[?] or Form who creates a business
that just creates an opportunity to push more ads or to be pejorative
to our user base. So Richard Weaver, for example, he reaches out to the
writing[?] leaders, to the spy-ware and anti-virus-ware companies…
Interviewee: to the IEB to ensure the what we’re doing is truely moving the user value ball forward in a very mature and professional manner.
Andrew: How did you get to half a million users?
Interviewee: A. We have our distribution model to start with is very much in partnership. We are a company that established close partnerships with content, commerce and service providers with software publishers etc. So what we’ve done, we established six starter partnerships and they distributed kickin to there user base. So you can come to kickin now and get kickin but obviously how many people know about kickin. We haven’t spent any money on marketing. In fact you are the first interview i’m taking on kickin. Thank you very much and no our partners have been the predominent by far, super dominent amount of distribution for us.
Andrew: And you pay them on a per download basis?
Interviewee: No no
Andrew: Take a share of the revenue
Interviewee: Yes, and we believe that since our partners, if you look at our user statistic. You will see that our users download kickin because of there ? with those partners, not because of association with kickin like I mentioned earlier, and we think not only do they get value from those partners; from all of our partners. Any individual user would, but we also think we should give our partners a percentage of revenue life time as it pertains to there affilliations and thats what we do. Its not a percentage of revenue on year one or year two it’s for the existance of that download.
Andrew: Are you white labeling it or is it labeled kickin?
Interviewee: Its labeled kickin. It has to be labeled kickin, not again because we are majorited by our partners but because we are a service that runs across all content, commerce and service providers. Get more cnn and then having the cnn i temp doesn’t make any sence because your getting facebook, your getting twitter but more importantly and this is also true for our partners. Our partners have also relised get more cnn was a effectively a cnn toolbar and whats the problem with a cnn toolbar. The problem with a cnn toolbar is you get cnn and when you don’t want cnn it becomes a nuisence and guess what the life time of toolbars are cascaiding downwords and is really a nuisence. However if you think of what we are doing which is we call a personal browser companion. That brings you multiple of these things. It allows you to understand it’s for you, by you, within your domain. Across your favorites, across your shared. So the kickin monicur is for horizontalizim.
Andrew: Can you give me a couple of the names of a couple of the companies you’ve partnered up with.
Interviewee: Yeah sure, i’m a little hesitant to release that publicly, not because I don’t want to. Our site will show you what our partners are but I just’ Larry handels the legel issues around what we can’t and can announce. I would love to do that but I’d be happy to follow up on that by email.
Andrew: Ok, and you said it’s on the website too?
Interviewee: And on the website you can see who we’ve intergrated formal, economic, content and distribution partnership Larry can send you info.
Andrew: Ok
Interviewee: and this would be Larry Allen by the way for those of you he was with tacota which is now with AOL and also real media. He’s been just a valuable and phenominal college of ours.
Andrew: I want to go back. I circled something that I just gotta go back to, or it’s just going to stick in my head all weekend long.
Interviewee: Sure
Andrew: Cox, whats the logic of them putting in new cables, reduing there system instead of just doing what vonage did?
Interviewee: Look at that time I understand why cox did that because at that time
Andrew: Right, help me understand how bigger companies work. I’m baffled by this.
Interviewee: Dude, that’s why i’m a start up guy. I don’t understand how big companies work. Let me tell you cox is a special example. They’re very good friends of mine. I tremendously respect them. I think cox constraint at the time was two fold. One was it was proven tested technology that brought quality level both of respect of quality of voice and also quality of service. That was well understood, number one. From a technology stand point they chose not to not be on bleeding edge if I may. Even though it wasn’t bleeding edge it was leading edge. They chose to not be leading edge, number one. Secondly at that time you had 911 for example incase you had a problem. Regularity constraints were on 911. 911 had to be up at all point of time.
which in turn meant it had to be a power dine. VOIP was not a power dine so we ended up coming up with E911. We pushed the legislation so there was some regulatory constraints at that time.
Interviewee: …Also at that time. But I would also argue by the way, that I don’t take Cox off the hook. Cox could’ve been innovative in a whole bunch of other areas. For example, why didn’t Cox offer all-you-can-eat phone calls? They were doing exactly what phone companies did, you know, here’s this feature, here’s that feature, here’s this phone call. Totally crazily from a user standpoint. Why didn’t Cox run a separate trial, see what white looks like relative to switch telephony and then switch over. Which they did, now, but. So I can give you twenty reasons why big companies do what they do, but I’m not a big company guy.
Andrew: All right, well-
Interviewee: I’m a start. I might, if anybody else on your audience are start-up people especially great engineers, we’re hiring, so we’ll take more start-up guys.
Andrew: Great engineers,what part of the country are you in?
Interviewee: We’re in New York City, but we have wonderful relocation, and I can think of worse places to move to. On a serious note, we’re hiring universally, so engineers, we’re desperately looking for very good business intelligence analysts, analytics is a big part of our business. So just in general send your resume. Dave Garfunkel, dave@kikin.com
Andrew: dave@kikin.com
Interviewee: Yeah.
Andrew: I see people asking questions about are you hiring financial people or more.
Interviewee: Sure.
Andrew: dave@kikin.com k-i-k-i-n.com
Interviewee: Yeah
Andrew: Cool. Well thank you for doing the interview with me, it’s great to meet you, I hope the next time I see you we’ll be in New York, where I’ll bring my helicopter out and we can go out for dinner somewhere.
Interviewee: Well, whether you have a helicopter or not it’s great to meet you in person, and we are often in LA. So it’s been wonderful to meet you in person Andrew. Thank you so much for having us. For users, try kikin.com, it will change your life.
Andrew: Alright, and congratulations and good luck with the new business.
Interviewee: Thank you Andrew.
Andrew: Bye.
Sponsors I mentioned
99designs – The largest crowdsourced design company. When I used them, I wrote a description of the design I needed and how much I paid. I got a bunch of designs back. I gave each designer feedback. I got more designs. I picked the one I liked. All within 3 days.
Shopify – Thousands of stores are built using Shopify because it’s easy to set up and manage. Tim Ferriss recently announced a contest that offers $100,000 prize for the highest grossing store. Go start your store now.
Grasshopper – Entrepreneurs (like me) love and use Grasshopper because it offers all the features of the big, expensive phone systems (like multiple extensions, music on hold and call forwarding) but it works with any phone and starts at only $9.95 a month.
